r----:::: .......... -~, --FILE No .. _3_Cj 1-~ 00 GERT. FILE

COLLECTIVE AGREEMENT

·---·--------i ·-----:-~,---~

2~~~!-MP~-~----·.i EFF. DATE 0 l . .---cJCA! - o_f! -----~--~ _. ~--~

EXP.DATE '31-'bEC-QS"i

COD~G co.~~~~-~--.JnATF.j ~E~;~i !DENT GODEDJ\LQ~ .. t ·- --RECENED­

between:

DAYTECHMFG. LTD. 70 DISCO ROAD, SUITE.101

TORONTO, ONTARIO M9W1L9

( Hereinafter referred to as the " Company " )

and

UNION r-F~~PI~Y~;; TJ!: ATIONAL UNION OF PAINTERS AND ALLJED TRADES - --·-····-·--·---sr AND PICTORIAL PAINTERS LOCAL UNION 1630,

OTHER 1 0 TORO ROAD, TORONTO, ONTARIO, M3J 3M9

( hereinafter referred to as the " Union " )

SECTION 1 -RECOGNITION

(a) The Company recognizes the Union as the sole collective bargaining agent for its employees in its Metropolitan Toronto plant other than:

i) Employees acting in a confidential capacity or having the authority to employ, discharge or discipline employees.

ii) Office and Sales Staff.

SECTION 2 -MANAGEMENT RIGHTS

(a) The Company has the right to direct the workforce that shall include the right to hire, assign, promote, transfer, discharge and discipline for cause. Forthermore, the Company has the right to maintain discipline and efficiency among the employees. The Union members shall not be discriminated against or harassed by reason of membership or for any other reason. The Company shall use its best effort possible to prevent discrimination or harassment by the Company or among the employees.

(b) It is agreed the Company and the Union will make every effort to resolve any issues arising from the above in an expedient manner.

SECTION 3 - STRIKE AND LOCKOUTS

(a) The Union agrees that there shall be no slow down, strike or work stoppage, or other interference with the Company's operations, and the Company agrees that there shall be no lock­outs.

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SECTION 4- UNION MANAGEMENT CO-OPERATION

(a) The Company agrees that it will not discriminate against any Shop Steward, Officer of the Local Union or any other employee who from time to time shall be appointed to represent other employees, and will grant leave of absence to employees who may be delegated to represent other employees. It is understood that the time so spent will not be excessive and that leave for tbis purpose will be reported ahead of time to the Vice-President of Operations or designate and will be reported further in conformity with the time-keeping records of the Company.

(b) The Union recognizing its responsibilities as the sole Bargaining Agent, agrees to co-operate with Management in eliminating absenteeism, lateness and any unfair practices, and further agrees that it will co-operate with Management in the production of a fair day's work and all other matters designed to elevate the trade and working conditions throughout the industry.

(c) Management in recognizing the Union as the sole Bargaining Agent agrees to co-operate with the Union in carrying out the conditions stated above.

(d) The Company will inform the Shop Stewards of any changes in working conditions that shall include hours of work, shutdowns, shift work, overtime or other matters pertaining directly to the employees covered by tbis agreement prior to such changes being implemented by the Company.

(e) The Union Business Representative after first obtaining permission from the Vice-President of Operations or designate shall have access to all areas of work covered by this Agreement.

(f) The Union contract shall be posted on the Bulletin Board at all times.

(g) The Company will report to the steward all verbal warnings and provide the steward with a copy of any disciplinary letters issued to employees. The Company will advise the shop steward, in writing, as to the classification of all new employees.

(h) It is agreed by both parties that any and all concerns that may arise amongst the employees and pertaining to tbis agreement shall be brought to the attention of the Company in a timely maoner and shall be dealt in accordance with the Company's Conduct and Discipline Policy or the grievance procedure set out in this agreement.

SECTION 5 -UNION SECURITY

(a) All employees other than those outlined in Section 1 shall become members of the Union sixty (60) calendar days after employment starts and shall maintain their membership as a condition of employment.

(b) It is understood that employees hired in a confidential capacity or having authority to employ, discharge or discipline employees, and who for any reason are transferred to the capacity of journeyman workman, etc. shall become members of the Union sixty (60) days after such transfer and shall maintain their memberships as a condition of employment.

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(c) The Company agrees to deduct the Union Dues according to the by-laws and Constitution of the Union from the first pay of each employee every month and remit same to the Local Union before the twentieth (20th) day of the same month. It is the sole responsibility of each and every member to continue payment of Union Dues directly to the Union during layoff and until recall by the Company.

(d) The Company agrees to deduct the Initiation Fee from the pay of a new employee upon authorization in writing from the employee to do so.

(e) Students may be employed in any department from May 15th to September 15th, and at Christmas and winter mid-term breaks. Students will not be employed in any department where permanent employees are not working because of lay-off. The student must pay the regular monthly union dues after five (5) days of work.

SECTION 6 - SHOP STEWARDS

(a) The Union may appoint up to three (3) Shop Stewards and the Company shall recognize the said Stewards as a Shop Committee. The appointed Stewards shall be regular employees of the Company. The Shop Committee shall deal with matters arising out of this Agreement.

(b) The Union shall inform the Company as to the names of the Committee members and any changes in the personoel comprising the committee as they may arise.

(c) Shop Stewards shall have top seniority after they have been employees of the Company for one year.

(d) There shall be no Union activity on Company tiroe or on Company premises except when necessary in conoection with the handling of Grievances and matters arising out of this Agreement.

SECTION 7 - CONTRACTJNG

(a) No employee steadily employed in a Union Shop is allowed to make or contract signs, or any other product manufactured or distributed by the company, on their own account.

(b) The Company reserves the right to contract out any work which bargaining lmit employees carmot perform for economic, efficiency, quality or customer service reasons. Notwithstanding the preceding, the Company will use its best efforts to retain in-house work typically performed by bargaining unit employees. It is agreed that if sub-contracting occurs, the Company shall demonstrate the need and logic of such action if requested to do so by the Shop Stewards.

SECTION 8- GRIEVANCE PROCEDURE

(a) A grievance shall be considered when the employee can demonstrate an alleged violation of the collective agreement. In order to proceed with a grievance the employee shall complete the proscribed grievance form, outlining the sections in the collective agreement alleged to have been violated, and submit the completed form to the Union Business Representative. No grievance shall be considered where the circumstances giving rise to it occurred or originated more than five (5) working days prior to the filing of the grievance.

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(b) The alleged grievance shall first be discussed by the employee with the Production Manager, in the presence of the Shop Steward. If the grievance is not settled within three (3) working days and the Union Business Representative feels that it is a valid grievance, it shall be forwarded to the Joint Labour Management Grievance Panel (hereby known as the "Panel") as outlined below.

(c) The Panel shall consist of equal representation of Union and Management delegates. The Panel shall meet at a designated time each month, or as deemed necessary, to consider any grievances forwarded to the Panel during the course of that month.

(d) During the Panel hearing, both the Grievor and Management shall have an opportunity to present to the Panel the facts surrounding the alleged grievance. The Panel shall attempt to reach a settlement agreement which shall be recommended to the parties for acceptance. If no acceptable settlement can be reached, the grievance shall be submitted to arbitration in accordance with the terms and conditions of this collective agreement and I or the Ontario Labour Relations Act. The matter must be submitted to arbitration within, but not more than, five (5) working days of the hearing before the Panel. Any discussions held before the Panel in pursuit of a mutually acceptable settlement will be on a without prejudice basis and carmot be raised should the unresolved grievance proceed to arbitration.

(e) Neither The Panel nor the arbitrator shall have the power to alter or change any of the provisions of this Agreement and the attached Conduct and Discipline Policy, nor to give any decision inconsistent with the terms and provisions of this Agreement and the attached Conduct and Discipline Policy, which forms a part of this Agreement.

(f) The parties may mutually agree to expedite the arbitration process by agreeing to an individual to act as Arbitrator to hear the matter in dispute.

SECTION 9 - SENIORITY

(a) A new employee shall be a probationary employee until he has completed ninety (90) calendar days with the Company, but the employee must join the Union sixty (60) calendar days after employment starts. During their ninety (90) day probationary period, the employee may be disciplined or discharged where, in the sole opinion of the company, the employee's performance and conduct is unsatisfactory. There shall be no responsibility on the part of the Company to re-employ a probationary employee who has been laid off.

(b) Seniority as used in this Agreement shall be the length of an employee's continuous service from the most recent date of hire with the Company in its Metropolitan Toronto Plant. When an employee has completed the probationary period, the employee shall be placed on the Seniority List and shall be credited with ninety (90) days of service.

(c) Loss of Seniority:

An employee shall lose all seniority and status as an employee if:

(i) The employee quits the employ of the Company (ii) The employee is discharged for just cause, except in the case of a probationary

employee as described above, and such discharge is not reversed through the grievance procedure.

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(iii) The employee; (a) Has been absent for three (3) consecutive working days without proper

notification to the Company, or (b) Does not return to work within three (3) working days after notice of recall, or (c) Does not return to work within three (3) working days following a leave of

absence granted by the Company, and bas not arranged for an extended leave with Company approval, and

(d) fails to report within five (5) working days of the Company sending a registered letter to the employee's last known address.

(iv) The employee is laid off for a period longer than six (6) months. (v) The employee bas been recalled after a lay-off, and fails to report within three (3)

working days or fails to give a reason satisfactory to the Company within eight (8) working days of receiving the recall notice as to why the employee did not report.

(vi) The employee bas been granted leave of absence and fails to report within thirty (30) days of the expiration date or fails to make arrangements to return to work or fails to make arrangements for extension of leave.

(d) A seniority list shall be kept np to date by the Company. Any objection to a seniority list must be made seven (7) working days after posting and if no objection is made, then the list, as posted shall be deemed to be correct.

(e) Vacancies:

(i) In filling a vacancy in the bargaining unit, the following factors shall be considered; the employee's skill, ability, and efficiency to meet the normal requirements of the work to be done.

(ii) All temporary transfers will be subject to the flexible workplace policy in Appendix A. (iii) It is agreed between the Company and the Union tbat any vacancies shall be posted as

per the Company policy and tbat the Shop Stewards shall be consulted of when such vacancies are being filled or when and laid-off employees are being recalled.

(f) Lay-off

(i) Any lay-off of employees shall be carried out in the reverse order of plant seniority. When it is necessary to retain employees with special skills or ability, then the senior employees having the specific skills and ability to perform the work in question shall be retained.

(ii) Employees will be recalled in reverse order oflay-off provided the employee maintains their seniority, has the skill and ability to perform the work required.

(iii) In the event of a permanent lay-off, that is to be deemed twenty-six (26) weeks, the employee sball receive any and all severance pay in the amount of one week pay for each year worked and all unpaid vacation pay earned to date provided that the employee has been employed with the Company more than five (5) years.

(iv) Office personnel will not replace a laid-off employee unless for a temporary emergency of not more than three (3) working days in any working week.

(v) In the event of a lay-off, the employee(s) affected, shall be notified two (2) working days prior to the Jay-off or receive two (2) days pay at the regular hourly rate. It shall be at the option of the Company to determine whether notice shall be given or pay will be given in lieu of notice.

(vii) At the discretion of the Company, a shorter hour work week may be given prior consideration before any lay-off and this will be applied on a separate departmental basis, and only employees with at least one year's service will be considered, and providing the employees whose services are retained have the skill, ability, merit and efficiency to satisfactorily perform the work required.

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(g) Selection:

In (e) & (f) above, selection will be based on the skill, ability and efficiency of the employee to carry out the work available. In the event the skill, ability and efficiency are equal, then seniority will be the deciding factor.

(h) Flexible Workplace Policy:

The company and the Union recognize that the employees are in various skill levels and must remain flexible in the work that they perform to maintain employment and due to the nature of the Company's business. All changes in job classification will be made in accordance with Appendix A- Flexible Workplace Policy.

The Flexible Workplace Policy will not apply if the transfer is permanent resulting from are­organization or restructuring of the Company.

(i) Leave of Absence:

The Company may grant leave of absence to any employee for legitimate personal or Union business, and any person who is absent with written permission, shall not be considered laid-off and the employee's seniority shall continue to accumulate during the employee's absence.

Ol Retirement:

It is to be recognized that the age of sixty-five (65) is the normal retirement date for any employee. Upon the employee attaining the age of sixty-five (65) the employee will apply to the Company for permission to continue working and the Company may grant such permission to work beyond the age of sixty-five (65) in six month periods. At the end of any six month period, the employee will re-apply for permission to work for a succeeding six months.

SECTION 10 -HOURS OF WORK

(a) The regular working day shall consist of eight (8) hours to be worked between the hours of 7:00 a.m and 3:30p.m. daily Monday through Friday, to provide for a total of forty (40) hours per week. If at any time the employees are designated to work on a Saturday, the starting time shall be 6:00a.m. This may be amended by mutual agreement between the Company and the Union.

(b) In the classifications of shipping and installation, it is agreed the working hours shall be eight (8) hours per day Monday through Friday to provide for a total of forty ( 40) hours per week, however, starting time shall be mutually agreed upon by the Company and the Shop Stewards to meet the needs and flexibility of the Company's operation.

(c) In the event a night shift is reqnired, it is agreed the working hours shall be ten (10) hours per day Monday through Thursday, between the hours of 3:30p.m. and 2:00a.m., for a total of forty (40) hours per week. A shift premium of fifty ($0.50) cents per hour above the basic hourly rate shall be paid. Lead hands, or a designate, shall be paid a shift premium of seventy­five ($0. 75) cents per hour above the basic hourly rate.

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(d) Any employee may be asked to alter their regularly scheduled shift. In the event a shift change is required, the Company will post notice of the change on the bulletin board at least two (2) weeks before the change is implemented. Employees affected by a shift change shall be given at least two (2) weeks notice of the change. No employee shall refuse shift work or a shift change without a reasonable excuse. Any requests to avoid shift work shall be submitted in writing and must clearly outline the employee's reasons for requesting to be excused from shift work ..

(e) Any work performed in excess of forty (40) hours between Monday and Friday shall be paid at a rate of time and one-half the employee's regular rate of pay. All work performed on Saturday shall be recognized as time and one-half the basic hourly rate. Sunday and Statutory Holidays shall be paid at double the employee's regular hourly rate of pay. In order to receive au overtime premium for Saturday work, an employee must have accumulated a total of forty (40) hours during the week between Monday and Friday.

If there is not enough work available in the shop to allow the employee(s) to attain their forty (40) hour threshold during the regular week (Monday to Friday), Saturday work shall then be paid at time and one-half the regular hourly rate, provided that the employee(s) has not refused overtime during the regular work week.

(f) The Company will endeavour to apportion all overtime on a fair and equal basis among all Employees. The Company and the Union shall monitor the apportionment of overtime in accordance with the following criteria;

(g)

(i) Overtime in a department shall be assigned to those employees from the department that have been working on the job requiring overtime immediately _prior to the overtime request.

(ii) If for any reason those employees refuse such overtime, a request will be made, first to the other employees in that department and second to other plant employees as long as the employee(s) have the skill and ability to perform the work.

(iii) For purposes of apportioning overtime pursuant to section lO(f)(ii), the Company will maintain a suuuuary listing of actual overtime worked to date by each employee in each department. When apportioning overtime, management will offer it first to those employees with the least accumulated overtime in the department, provided that they have the skill and ability to perform the work requiring overtime.

(iii) All overtime is of a voluntary nature and economics shall not be the prevailing factor in the awarding of overtime. Consideration shall be given as to the amount of overtime designated to all employees as per Section (i) & (ii) above.

If au employee works two (2) hours overtime the employee shall receive a meal allowance in the amount of three dollars and fifty cents ($ 3.50). If an employee works three (3) or more hours of overtime then the meal allowance shall increase to seven dollars ($7 .00) for each employee.

(h) In the event an employee works overtime a break of ten (10) minutes shall be given every two (2) hours worked.

SECTION 11- REPORTING ALLOWANCE

(a) Any employee who reports for work on a normal working day, unless he has been notified not to report, shall be provided with two (2) hours of work; however, if no work is available, the employee shall receive two (2) hours pay at the employee's regular rate. Any employee who is requested by the Company to report for work on a Saturday or Sunday or a Statutory Holiday

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shall be provided with two (2) hours of work; however, if no work is available the employee shall receive two (2) hours pay at the applicable overtime rate. Those employees who have been instructed to report should telephone the company prior to leaving home, if, due to uncertain weather conditions, they are in doubt as to the Company's plan.

SECTION 12- OUT OF TOWN WORK

(a) The Company reserves the right to assign outside and/or out of town work to any inside bargaining unit employee able and willing to do such work provided such work does not exceed ten (10) working days. A notice of seventy-two (72) hours shall be given, with exception for emergency situations, to an employee assigned from the Plant to work outside. If the work exceeds ten (10) working days, reference shall be made to the Appendix - A, Flexible WorkPlace Policy.

(b) All travel time is at the employee's basic hourly rate of pay from the time the employee leaves the plant to the job and from the job to the plant. In circumstances whereby the employee is not needed to go to the plant first, the employee may be directed by the Company to go directly to the job whereby the employee shall be paid from the time the employee arrives on site within the normal working hours.

(c) In the event an employee(s) requires overnight accommodations the Company is responsible for reasonable hotel expenses supported by receipts plus forty-five ($45.00) dollars for meals per day. The Company is responsible for lunch and dinner meals on the first day of travel and all meals on return day of travel during Company time.

Breakfast Lunch Dinner

$6.00 $12.00 $27.00

(d) If an out of town job is of a long duration, the Company will discuss the feasibility of bringing back the employee(s) to their home base at some time during the assignment. All reasonable requests shall be considered between the Company and the Union.

SECTION 13 -HEIGHT PREMIUM

(a) A premium of one dollar ($1.00) per hour shall be paid for all work on a Swing-Stage or Bosun Chair.

(b) The overtime rates specified under Section 10 shall be in addition to the standard Height Premiums.

SECTION 14- REST PERIODS

(a) A rest period of ten (10) minutes shall be provided for in the morning and afternoon work periods. No infringement of this privilege shall be allowed by an employee without special permission of the Employer.

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SECTION 15- STATUTORY HOLIDAYS

(a) The Company agrees to pay for the following Statutory Holidays:

New Year's Day Good Friday Victoria Day

Canada Day Civic Holiday Labour Day

Thaoksgiving Day Cbristmas Day Boxing Day

(b) The Company agrees to pay for an extra Statutory Holiday, to be agreed upon between the Company and the Union. This provision applies to employees who have completed thirty (30) working days in the employ of the Company, and who have worked the last working day preceding the holiday and the first working day following the holiday unless they bave been granted permission by the Company to be absent or they are able to present a bona fide doctor's certificate to explain their absence.

SECTION 16 - VACATIONS

(a)

(b)

Vacation periods shall be arraoged as nearly as can be met to meet the convenience of the employer and the employees, however the Company retains the right to set up a vacation

schedule to best ensure the proper and continuous operation ofit's business. Each employ-ee ''1 shall be paid their vacation pay by July 15th of the current year with vacation based and calculated from date of hire with the Company. The Company agrees to supply each employee the accmnulated vacation pay earned to date on a bi-monthly basis.

Employees who make arrangements with the employer to take a vacation after December in each year can receive their accumulated vacation pay early by giving two weeks notice to the Employer prior to their vacation.

(c) Vacation entitlement will be earned as follows;

(i) An employee with less than one year of service as of June 30th of a given year shall have their vacation pay and vacation leave entitlement calculated in accordance with the Employment Standards Act as it is in effect at the time.

(ii) An employee with more than one year service as of June 30th of a given year shall have their vacation pay and vacation leave entitlement calculated as follows;

YEARS OF COMPLETED VACATION LEAVE SERVICE VACATION PAY RATE ENTITLEMENT

1-5 4% of Gross Pay 10 Working Days

6-12 6% of Gross Pay 15 Working Days

13-22 8% of Gross Pay 20 Working Days

More than 22 10% of Gross Pay 25 Working Days

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(d) Gross pay shall be defined as an employee's total earnings before any deductions for the period July 01 through June 30th of the vacationyear in question.

(e) An employee shall advance to the next vacation category upon achieving their 5th, 12th and 22nd anniversary of being employed with the Company, at which time any future vacation pay entitlement will be calculated at the rate appropriate to their new category, as applied to their earnings from their anniversary date to June 30th of the year.

(f) Employees shall not be entitled to more than three (3) weeks leave at any one time and all vacation leave shall be taken io the same year the vacation leave is earned. It is agreed no reasonable request to extend the vacation leave or take leave in the following year will be refused by the Company.

SECTION 17- WAGE AND BENEFITS

(a) The company wishes to provide members of the Bargaining Unit with the ability to enbance their earnings beyond their base hourly rates by implementing a Production Team Incentive Program (the "Incentive Program".) The Incentive Program will pay to members of the Bargaining Unit monetary rewards io three separate categories- Productivity, Indirect Labour, Delivery and Efficiency provided that certain mioimum measurements are achieved.

(b) Each Quarter, provided that the combined contributions to the Production, Indirect Labour, Delivery Efficiency and Safety bonus pools exceed the Minimum Negotiated Hourly Rate Increase, as set out io Schedule A, the net difference between the amount io the Incentive Bonus pool and the amonnt represented by the negotiated hourly guaranteed production team iocentive will be paid on a separate cheque to each employee, subject to all statutory deductions.

(c) Assume, for example, that 40 bargaining unit employees are participating io the plan, the negotiated hourly guaranteed production team incentive for the period in question is $0.40 per hour and the Incentive Program has generated contributions to the Bonus Pool which total $15,000.00 for the quarter.

(d) In this situation, the additional bonus award per employee would be calculated as follows:

Bonus Pool Earnings per Hour:

$15,000.00 divided by(# of employees X 520 hours) equals $0.72

X Number of Hours io Quarter (13 weeks X 40 hours per week) 520

Gross Incentive Program Earnings (for three months) $375

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Incentive Program Prepayment:

Negotiated Hourly Rate $.40

X Number of Hours in Quarter 520

Minimum Negotiated Hourly Rate Increase (Paid during quarter)

208

Quarter End Bonus Payment per Employee $167

(e) Improvements in the production times on every job will be analysed to determine the primary factors which resulted in the betterment (ie. new methods, ideas, machinery, process changes, staff contributions, etc .. ) The reasons for the gains will be posted whenever possible, to create awareness of new ideas, methods and processes. On each job, Production Times will be accumulated and divided by the total number of parts produced in order to establish the historical standard. Process sheets will be updated to show the standard times for each stage of a product's manufacture. As a result each employee working on a work order will have clear targets to work towards. In order to verify time standards Management has the right to build a product or products and to make suggestions aimed at reducing the standard labour component of the product's cost.

(f) Production Team Incentive Program

(i) It is agreed by the Union and the Company that a Production Team Incentive Program (Incentive Program) will be implemented as part of the Collective Agreement. The payments uoder the Incentive Program will be paid to all Bargaining Unit Employees as outlined herein. An employee who leaves or joins the company within a quarter will be paid on a pro-rated basis. At the end of each quarter the Production Incentive Bonus will be calculated and paid within two pay periods.

(ii) The minimum negotiated hourly rate increase is retroactive to January 1, 2003 and will be added to the base hourly rates on the dates outlined in Schedule A.

1. Productivity Incentive

(i) The company will contribute to the Production Team Incentive Pool each time the average labour component of a product or part is reduced by 10% or more. Productivity improvements will be measured based on the historic average times after a product has been manufactured at least four times. Initial standards will be established and posted after reviewing the history for the preceding twelve months.

(ii) For large orders of complete product, which result in subassemblies and other components being mass produced on production orders, product time standards will be determined for each sub-assembly and individual component as well as the fiual assembly and installation.

(iii) In the case of small quantity orders, where little or no mass produced subassemblies or components are used, the total time per uoit will be accumulated and measured against the historical average labour component of the product(s) in question.

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(iv) A contribution to the Production Team Incentive Pool will be made when the actual labour component of a completed product is at least 10% lower thau the historic average time required to manufacture the product or part. Additional contributions will be made to the Incentive Pool for each additional percentage improvement. The contribution will amount to 15% of the actual savings in labour costs. In the event the total accumulated labour time on a job exceeds the average historic time, the unfavourable variance will be charged to the production team incentive pool.

(v) New product development projects, or products which have yet to be built four times, will have budgeted times established prior to the commencement of any production activity. Management must approve all adjustments to the budget and the new product design prior to the changes being implemented on the shop floor. In the event the total accumulated time is under budget by 10% or more, a contribution equal to 15% of the labour cost savings versus the budget will be made to the production team incentive pool. In the event the actual accumulated time exceeds the budgeted time for labour, the unfavourable variance will be charged to the production team incentive pool.

(vi) Material cost reductions will be excluded from this piau unless the design change was proposed by a bargaining unit employee (ie. New extrusion shape or redesign of existing extrusion) and the change ultimately results in cost savings of at least ten percent. In the event of a cost savings versus average historical or standard cost in excess of 10%, a contribution equal to 15% of the savings on the job giving rise to the savings will be made to the production team incentive pool.

(vii) In the event a production bonus is achieved, such bonus shall be calculated on a quarterly basis commencing J auuary 1, 2003 through March 31, 2003, and in each successive quarter thereafter, to the tennination of this collective agreement.

(viii) Office personnel will review recorded times for accuracy in the normal course of business. In the event errors or discrepancies are discovered, Management has the right to make any necessary adjustments. Bargaining Unit representatives have the right to review the compilation of actual labour times on a job by job basis.

(ix) 50% of all rework costs for the quarter will be charged back against the Production Team Incentive Pool.

(x) The Union and Company recognize that a point will eventually be reached wherein no significant improvements can be made to the direct labour component of a product or part, whereupon management will deem the Average Historical Time to be the Standard Time for that product or part. The company agrees to contribute 1. 5% of the direct labour component of the product or part to the Production Team Incentive Pool provided that the total accumulated labour for the current job does not exceed the Standard Time. It is further agreed that any unfavourable labour variances against standard time will be charged to the Production Team Incentive Pool.

2. Indirect Labour Incentive

(i) It has been established that budgeted indirect labour currently represents 7. 5 bargaining unit employees. Indirect labour functions consist of the following categories:

Operation #158 Process Planning #159 Expediting #170 Receiving -Inspection #171 Receiving -Materials

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# 185 Material Handling - Stores #186 Material Handling - Raw Materials #187 Material Handling - Finished Goods or Materials #192 Quality Control Functions #193 Indirect Labour- Cleaning #194 Indirect Labour- Supervision #195 Indirect Labour- Health & Safety # 196 Indirect Labour - Training #197 Indirect Labour- Maintenance #198 Indirect Labour- Pick Up & Delivery

(li) For each month that the accumulated indirectlabour hours do not exceed the equivalent of7.5 employees, the company will contribute $1,000.00 to the Production Team Incentive Pool. Special projects, as determined by management, will have a work order assigned to them and will not be added to or included in the tabulation of indirect labour for the month.

(ill) Management reserves the right to revise the target of 7. 5 employees due to the impact that certain operational or organizational changes may have on the company's Indirect Labour Budget.

3. Shipping Efficiency Incentive

(i) A contribution of $1000.00 will be made to the Production Team Incentive Pool for each month in which the company achieves 100 % on time deliveries based upon the due dates set out iu the monthly production schedule.

(li) A contribution of $500.00 will be made to the Production Team Incentive Pool for each month in which the company achieves 95% on time deliveries based upon the due dates set out in the monthly production schedule.

(iii) It is acknowledged that, in the interests of customer satisfaction, the production schedule may have to be altered from time to time. Management will use its best efforts to minimize alterations to the production schedule as published at the outset of each month. If an order's acmal shipping date is adversely affected by factors not controllable by bargaining unit employees (e.g. certain supplier back-orders, client delays or rush jobs approved in advance by production management) it may be excluded from the calculation of on time deliveries for the purposes of this incentive program.

(iv) A product is deemed to be shipped when all paperwork, crating and packaging is completed and shipping arrangements have been confirmed by the shipping department.

(v) The lost time board will be updated and maintained each day.

(g) Appendix - B of this agreement shall outline rniuimum hourly rates for all existing classifications and for new hires at the Company during the term of this agreement.

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(h) BENEFITS:

The Company shall pay for all premiums of the health benefits including dental and vision care with the following conditions;

(i) Major Medical:

A drug card will be supplied to each Employee to allow for the purchase of prescription drugs with no cash outlay by the employee with the exception of a $5.00 per prescription user fee, which the employee will be required to pay upon picking up their prescription.

(ii) Dental:

(1) Recall for the purpose of cleaning and check-up will be every nine (9) months.

(2) Ontario Dental Association Fee schednle for 1998 will be applied at signing of the agreement. Each year on the anniversary date of the agreement the O.D.A. schednle shall be increased one year until this agreement expires.

(3) Any and all employees with less than two (2) years service with the Company shall have dental expenses capped at five hundred ($500.00) dollars per year.

(iii) Occupational Accident:

Any employee prevented from performing their regnlar work with the Company as a resnlt of an occupational accident recognized by the Workplace Safety and Insurance Board, as compensable in accordance with the WSIB rnles and regnlations shall continue to receive from the Company all medical benefits as per this agreement up to one (1) year from the date of the accident. Employee(s) laid-off shall continue to receive coverage for benefits for a period of two months following lay-off.

(iv) Pension:

In the event employees in the bargaining nnit agree to join the Union Pension Plan, the parties agree upon sixty (60) days written notice the Company shall arrange to deduct and remit contributions from employee's wages.

(v) Safety Shoes:

After one year of employment, all employees are eligible to receive a maxiroum of $100.00 per year towards the purchase of a new pair of safety boots at any time during the calendar year co=encing January 1, 2003. The employee must submit a receipt supporting the purchase of a new pair of safety boots and shall turn in their old work boots prior to receiving the reimbursement. Employees worldng in the welding and installation departments may be eligible for a second pair of safety boots during the year, provided that they can demonstrate the need for a new pair of safety boots and submit a receipt for their replacement pair. Reimbursement for safety boots will be made on a separate cheque

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(vi) Clothing :

The Company agrees to supply adequate clothiug to prevent an employee's personal clothing from damage or wear due to working conditions. Furthermore, it is agreed outside clothing shall be made available for employees (inside/outside) working in unfavourable conditions. All clothing supplied is the property of the Company and the Companies responsibility to clean and replace if damaged. All clothing, when not in use, must be kept on Company premises.

(vii) Tools:

The Company agrees to replace or reimburse employees for tools that have been broken or damaged during their employment with the Company. The employee must verify to their inunediate supervisor of such damage.

(viii) Safety Incentive Program

(i) A bonus of $45.00 will be paid to each employee for each quarter that the employee has not had a lost time accident.

(ii) A lost time accident is defined as "an accident which resulted in time being lost after the initial day of the accident."

(iii) If a total of five or more working days are lost in a quarter due to lost time accidents, no safety bonus will be paid to any employee for that quarter.

SECTION 18- JURY/CROWN WITNESS DUTY

(a) If an employee is called for Jury Duty or crown witness service, the Company shall pay his wages while he is serving jury duty or as a crown witoess, less the amount of compensation the employee receives as a jura~ or crown witness.

SECTION 19- DEATH IN THE FAMILY

(a) In the event of death in the inunediate family of an employee, he shall be allowed three days with pay. For the purpose of this provision, the inunediate family shall mean:

Husband or Wife Son or Daughter Grandparents

SECTION 20- TERMINATION

Mother or Father Mother-in-law Brother-in-law

Sister or Brother Father-in-law Sister-in-law

(a) This agreement shall become effective upon ratification and shall remain in force until December 31, 2005. This agreement shall remain in force for a further one (1) year period unless notice is given by either party sixty (60) days prior to the expiration date.

(b) Within thirty (30) days of receipt of such notice by either party of intention to offer change to the agreement a joint meeting of the parties must be held.

(c) If negotiations are in progress for a new collective agreement at termination of this agreement, this agreement shall remain in force to the conclusion of negotiations.

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..

FOR THE COMPANY FOR THE UNION

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Schedule A

Minimum Guaranteed Negotiated Hourly Rate Increase:

Upon Ratification $0.35/hr

December 31, 2004 $0.45/br

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December 31, 2005 $0.50/br

APPENDIX-A

FLEXIBLE WORKPLACE POLICY

The Company and the Union agree it is in the interest of both parties to develop rnaximmn flexibility within the workforce. To ensure productivity, replacement for absent employees or to prevent lay-offs, employees may be transferred between departroents. In the event of a temporary transfer the following shall apply;

1. (a) (b)

(c)

An employee will not suffer a loss of pay, If an employee is transferred to a higher paying classification, the employee will be paid the higher rate of pay after working in that classification three (3) consecutive days, An employee will revert back to their original rate of pay from the previous classification when they transfer back to their original classification.

2. An employee will retain their seniority plant wide, however, when transferring to another departroent the seniority for that departroent begins at the time the transfer is complete.

3. A transfer of more than one month in duration will be posted in accordance with Company practice and policy.

4. Selection of employees to another department will be dependant on the following criteria;

(a) The skill and ability to perform such work,

(b) seniority with the Company, and

(c) where skill and ability are equal seniority will be the deciding factor.

The selection will be made by the Production Manager with input from the departroental foreman and the appropriate union steward.

5. In the event an employee is transferred into another department, it is the responsibility of the departroental foreman to ensure all safety measures are explained and that the employee is properly trained in all aspects of safety in the new department for hazards in the operation of any eqnipment.

6. An employee remaining longer than twenty-six weeks in a new department will be considered permanent in that departroent.

7. The Flexible Workplace Policy will not apply if the transfer is permanent due to a restmcturing or re­organization of Company operations.

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APPENDIXB

DAYTECHMFG. LTD.

MJNIMUM WAGE RATES BY CLASSIFICATIONS

LEVEL CLASSIFICATION START 6MTHS 12MTHS 18MTHS

1 CNC Milling Machine Programmer/Operator 18.18 18.78 19.38 19.98 ABB Welding Robot Programmer/Operator

2 CNC Milling Machine Operator 13.68 14.28 14.88 15.48

3 Welder 14.19 14.90 15.49 16.33

4 Installer 13.32 13.98 14.65 15.31 Maintenance Electrical Shipper

5 Metal Fabrication 12.45 13.07 13.68 14.29 Assembly

6 Final Assembly 11.59 12.15 12.68 13.27 Receiver Inventory /Stockroom Control Clerk Welder Helper Roll Former

7 General Labour 10.70 11.20 11.70 12.20 Installer Helper

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DAYTECH:M:FG. LTD. MINJMUM WAGE RATES BY CLASSIFICATIONS

EFFECTIVE DECEMBER 31, 2003

LEVEL CLASSIFICATION START 6MTHS 12MTHS lSMTHS

1 CNC Milling Machine Programmer/Operator 18.63 19.23 19.83 20.43

ABB Welding Robot Programmer/OQerator

2 CNC Milling Machine Operator 14.13 14.73 15.33 15.93

3 Welder 14.64 15.35 15.94 16.78

4 Installer 13.77 14.43 15.10 15.76

Maintenance Electrical ShipQ.er

5 Metal Fabrication 12.90 13.52 14.13 14.74

Assembly 6 Final Assembly 12.04 12.60 13.13 13.72

Receiver Inventory/Stockroom Control Clerk Welder Helper Roll Former

7 General Labour 11.15 11.65 12.15 12.65

Installer Helper

1